Now Playing

9/24/2013 10:35AM

BlackBerry Deal: An Analyst's Take

BlackBerry has been rated a 'very high risk' for several quarters by ratings agency Rapid Ratings. Given their standing, the company had little choice but to do something dramatic, Rapid Ratings CEO James Gellert says on MoneyBeat.

This transcript has been automatically generated and may not be 100% accurate.

... in ... my ears go private deal saving grace for a company that was sinking rapidly ... the demon with a buyout offer he can't change the fact that the company lost the consumer ... and consumer drives the market we don't want to cellphones and handsets ... rapid reading CEO James Geller is here this morning on the MoneyBeat show to talk about blackberries ... I had to a shaky future really James welcome to the show the judges are going on today of course on your firm rapid ratings ... had fled BlackBerry a while ago ... here we are we're a company is in terms of their financial health with no fish with Iran while the user assets ... no other performing on a wide variety of metrics and we downgraded BlackBerry ... from their two thousand ... eleven in two thousand twelve numbers were starter bringing them down they've been in the eighties honor hundred point scale ... and their arty down now and they've been down for quite some time that when it's mid twenties is very high risk and to ... for context ninety percent of companies historically it failed then fail to be in a forty mm below on our scale so you're in the twenties you're in that zone right your heart's you expected that something was going to happen with this thought something had happened write something had happened ... they had a deal ... I how how good is this deal was this do for the company ... I'm not sure what it does today it sets a line in the sand which at least once the market talk about a nine dollar price tag ... by John Fairfax's a logical buyer in the sense that they own ten percent or raid their Canadian ... others an emotional attachment which is probably driving this to some extent ... aam but they're not conserving catch ... so at this stage additional financing needs to be a range of still execution risk of BlackBerry can shop the deal but given where the where the shares traded and close last night ... it's un clear that anyone thinks there's going to be a competing bid from Orange confirmed or nine dollars is a gander ... similar to what Dell went there were Michael that still said that we take this thing private weekend we can rebuild the company out of view of the public markets ... you might think that black Ray wants to do the same panel that he was taken right ... but for the challenges for this company how hard is it not going to be ... I mean they went from ... being a dominant player in handsets ... to be no one is really now a niche player ... with the other two points one ... of the Dell deal is quite different you've got a CEO with with a big challenge himself ... contributing dollars you've got a real money on dollars behind it and re financing already ... compared to a contrast to BlackBerry aware of the financing structure the deal school exactly structures ... I think the concept of trying to rebuild is a private company that makes sense if you get out of the public eye and the Whittier public or private it doesn't change the fact that they had a very very difficult business environment ... and as you rightly pointed out they've they've lost the of the consumer handset to ... play and that means they've got a retreat in what they're saying is we're going to drop the consumer market ... for Warner retreat to the enterprise market to the enterprise market isn't what it use to be when they had such significant market share in today consumers are driving a lot more of the enterprise market anyway ... in the consumers are spoken ... for and you see their share of ... the phone is to work I mean ... you know what I had a BlackBerry when all we could have or BlackBerrys ... then we can have Apple and other devices ... that now I am an I phone ... and that that has happened a lot of places ... D can't change the trend ... noted that the concept is called bring your own device ... and a lot of enterprises or are increasing it ... because it makes it cheaper than domestic BlackBerry on the enterprise side ... aam but it also caters to all of the consumers within an enterprise and when you had the black furry probably also had a personal phone which was one of the phone whenever phone you're actually wanted to use of what ... people don't like to carry two devices this is this a convenience factor and consumers clearly ... have decided that they want more features a more bells and whistles and the better operating systems ... and BlackBerry the new BlackBerry operating system for too long to come out will you continue reading this company Elan of private depends ... depends what a bill of what the availability is of their financials Hwee reread every public company that files quarterly ... quarterly so we're constantly providing a dynamic assessment of credit risk some private companies will continue to disclose financials ... and we will bring us to ... what you would you be looking for ... BlackBerry by income statement balance sheet is why we humans will we look for to read and income from ... art James Phillips rapper readings